Drupal: Turning a Free Product into a Real Business

As a hobby project in 1999, Dries Buytaert created an open source version of a message board, which he called Drupal. And he just kept adding things like blogs, content management, polls and so on. Of course, he had the help of many programmers across the world, who contributed to the project.

As of now, Drupal is a powerful force in the tech world. There are over 600,000 users and developers of the system.

So when Dries finished up his PhD in computer science and engineering, he wanted to see if he could turn Drupal into a viable business. The result was a new venture called Acquia, which got its start in 2007. “I thought Drupal could be a commercial-grade product for the enterprise,” said Dries (we recently talked via Skype while he was in Brazil).

It seems kind of counterintuitive to create a business around a free product. But then again, Red Hat (NYSE:RHT) has shown that it can be done. Keep in mind that the company is on pace to generate $1 billion in revenues for 2011.

As for Acquia, it has forged several revenue streams. First of all, there is a subscription service for learning and productivity tools. And yes, if you want to get your website hosted, you can try the Acquia Cloud.

There is even a service to quickly build social websites. Acquia calls this "social as a service.”

All in all, Acquia has had little trouble snagging top-notch customers (the count is over 1,000). For example, eBay (Nasdaq:EBAY) is using the company’s technology for its X.commerce developers website. Twitter is also doing the same with its own platform.

To continue the growth ramp, Acquia recently raised $15 million in venture funding from Tenaya Capital, Northbridge Venture Partners and Sigma Partners. With the money, the company plans to get more aggressive with expansion into foreign markets. “I think Drupal can be a big business,” said Dries.

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